More tales of the misfortunes that befall Meshulam Riklis' creditors.

At age 78 Meshulam Riklis has lost none of his agility in holding creditors at bay. Lenders and suppliers of York, Pa.-based McCrory Corp., the old five-and-dime chain that's the last remnant of the Riklis empire, are demanding blood from the former corporate raider. They might have an easier time with a turnip.

Riklis pushed McCrory, a company he first bought in 1960, into five years of bankruptcy proceedings in 1992, only to buy back its assets in 1997. The price tag looked steep: $51 million. But only $16 million of the purchase price was in cash. The remaining $35 million was in paper, representing the assumption of the old McCrory's outstanding debt to K&K, a Riklis-controlled entity.

The terms of the deal doomed McCrory. It started paying K&K $5 million a year in interest on the assumed outstanding debt, draining needed capital, say creditors. Adding to the debt was the nearly $1 million annual salary paid to Riklis and hundreds of thousands more to his advisers. The company tried to latch onto a retailing trend, converting variety stores into dollar stores, but lost money from the get-go--$12 million in the fiscal year ended Feb. 3, 2000.

With assets of $66 million and liabilities of $110 million, McCrory went back into Chapter 11 in September 2001. McCrory liquidated its inventory, but couldn't pay back its secured lender, Foothill Capital, a unit of Wells Fargo & Co., which collected on half of the $32 million it was owed.

Where did Foothill's collateral go? Creditors say Riklis transferred art and antiques in 2000 insured for $9 million from McCrory to Rikent, another Riklis family entity, at book value of $4.6 million. Rikent didn't pay in cash; instead, Riklis reduced the debt McCrory owed other companies he controlled. Among other things, the transaction credited McCrory with only $175,000 for both Piet Mondrian's "Composition with Yellow" and Fernand Léger's "Contrastes de formes," but a Riklis entity sold the Léger alone for $2.5 million.

Other curious transactions: Two McCrory subsidiaries apparently shifted $12.5 million in cash and notes to Riklis-controlled entities for further debt cancelation. Creditors sued Riklis in June for the $50 million they are owed, alleging fraud and claiming that the transfer of assets was a contrivance to shield them from a planned bankruptcy. Not so, says Riklis' lawyer, Duane Werb, who claims the asset shuffling was part of a legitimate reorganization that reduced McCrory's debt by $22 million.

That would be more believable if not for Riklis' lifetime habit of stripping assets from debt-laden companies--and leaving creditors in the lurch. At right, a sample of the shenanigans by the man who married and bankrolled Pia Zadora, and who last appeared on The Forbes 400 in 1990.

Corporate Graveyard

Behold the kiss of death from Meshulam Riklis, who lives on.

Company: RIVIERA

What Riklis got: Bragging rights for what was then one of the most lavish casinos on the strip.

Result: Filed for Chapter 11 in December 1991, with reported $240 million in debt.

What creditors got: Ownership of the casino and hotel.

Company: MCCRORY CORP.

What Riklis got: Rapid expansion of a retail empire.

Result: Filed for Chapter 11 in February 1992, with reported $540 million in debt.

What creditors got: Nothing.

Company: MCCRORY PARENT CORP.

What Riklis got: Transferred 90% of the assets to companies he controlled.

Result: Filed for Chapter 11 in February 1992 with about $500 million in debt.

What creditors got: Next to nothing.

Company: E-II HOLDINGS

What Riklis got: More than $500 million in assets transferred from holding company for Samsonite luggage to other companies he controlled, say bondholders.

Result: Filed for Chapter 11 in July 1992, with $1.5 billion due bondholders.

What creditors got: 46 cents on the dollar plus ownership in reorganized company.

Company: DYLEX

What Riklis got: $8 million in cash (U.S. dollar equivalent) to his companies.

Result: Canadian retailer filed for bankruptcy in August 2001, with debts of $50 million.

What creditors got: 18 cents on the dollar.

Company: MCCRORY CORP.

What Riklis got: $30 million of assets to companies he controls.

Result: Filed for Chapter 11 in September 2001, with debts of $110 million.

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